Can theIRS shut down my business for not being able to pay my payroll taxes if I am currently under personal bankruptcy?

Asked on September 17, 2011 under Bankruptcy Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You should consult with a bankruptcy attorney for a more definitive answer, but you facing at least one, if not both of the following problems:

1) Tax debts are not discharged in bankruptcy; while collections efforts of them may be temporarily stayed or halted while the bankruptcy proceeds, that's a temporary stay at best--you can't eliminate the tax debt or stop the IRS from ultimately collecting.

2) If the business is a corporation or LLC, it is separate from you--it is its own legal entity or "person"--and therefore your personal bankruptcy does not affect it any more than your personal assets, etc. would be affected if a corporation in which you were an investor filed for bankruptcy.


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